The Chilean, who's previous deal was to expire at the end of this season, has put pen to paper on a new contract to 2027.
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After several unsuccessful meetings, the last one, held a few days ago, allowed positions to be brought closer to the point that the club made the agreement official in advance of the derby at Sevilla this weekend.
Pellegrini has been with Real Betis since 2020.
Significantly, the new agreement includes a break clause for Pellegrini in the event he receives an offer to take charge of the Chile national team.
It has always been Pellegrini's plan to retire once he has a spell in charge of his national team.